Dapper Ethereum Smart Contract Wallet: Security Review

Sigma Prime was commercially engaged by Dapper Labs to perform a time-boxed security review of an Ethereum smart contract wallet. This post details 3 vulnerabilities which were identified in the course of this assessment, and subsequently resolved. The full security assessment report for this engagement and the supporting test suite are available here.

Executive Summary

Dapper Labs commercially engaged Sigma Prime to perform a security review of the Dapper smart contract wallet. The
review focused on security aspects of the smart contract's Solidity implementation, though general recommendations and informational comments relating to code quality and gas usage optimisations were also provided.

Sigma Prime's assessment identified some issues and improvements, which were promptly addressed by Dapper Labs. Reviewers note that despite these issues, the smart contracts were particularly well written and the code quality was of a high calibre.

This review was initially conducted on commit 2d68897.

Retesting activities targeted the commit 6b3784e, which contains code modifications and corrections made as a result of the initial report. Sigma Prime's retesting concluded that the smart contract remediations were effective and no further vulnerabilities were identified.

The testing team identified a total of six (6) issues during this assessment, of which:

One (1) is classified as high risk;

One (1) is classified as medium risk;

Four (4) are classified as informational.

All these issues have been acknowledged and addressed by the Dapper Labs development team.

Introduction

Dapper Labs is a Blockchain startup renowned for the creation of CryptoKitties, a collectable game using the ERC-721 standard on Ethereum. This post details a recent review of Dapper, an Ethereum smart contract wallet designed and developed by Dapper Labs.

Dapper is a smart contract wallet for Ethereum which provides an authorisation mapping, enabling fine-grained and user-sovereign control over the wallet's funds and assets (e.g. Ether, ERC223 tokens, non-fungible tokens, etc.). This wallet also allows users to play supported decentralised applications (e.g. CryptoKitties, Decentraland, Etheremon) without having to worry about paying for transaction fees on the Ethereum network (i.e. gas).

This wallet implements the following features:

Multi-signature support (two-of-two) with a co-signing check: co-signing addresses can be other contracts (to potentially enforce additional verification);

Recovery operation: a backup transaction that removes all existing authorisations and sets a new device key as the sole administrator.

The main smart contract of this wallet is CoreWallet and can be used in two forms:

Standalone full wallet, by deploying the FullWallet contract;

Cloned wallet, by leveraging a WalletFactory contract.

The CoreWallet provides support for 1-of-1 or 2-of-2 multi-signatures. A signer is an individual entity that signs invocations and interacts with the wallet. A signer must be authorised to invoke actions on the wallet. Optionally, a signer can also have a co-signer, which places an additional requirement of needing signatures from both the signer and the co-signer to invoke functions on the wallet.

A signer can be removed from the authorised users by setting its co-signer to zero.

The CoreWallet smart contract supports four different methods of interacting with the wallet:

A signer invokes a method directly when there are no co-signers (invoke0);

A signer supplies the co-signer's signature with the method invocation (invoke1SignerSends);

A co-signer supplies the signer's signature with the method invocation (invoke1CosignerSends);

Anyone explicitly supplies both the signer and co-signer signatures with the method invocation (invoke2).

All vulnerabilities identified during this assessment have been remediated by Dapper Labs.

Detailed Findings

This section provides a detailed description of three vulnerabilities identified within the Dapper smart contract wallet. Each vulnerability has a severity classification which is determined by its likelihood and impact. Please refer to our full report for further information.

Replay Attacks on Co-Signer Signed Invocations (Resolved)

Background information

Replay attacks (sometimes also referred to as playback attacks) are a class of network attacks where a malicious actor purposefully and fraudulently re-transmits a message (or in a Blockchain context, a transaction) with the intention of causing the message to be successfully processed more than once. This category of attacks can affect a wide variety of protocols and systems (e.g authentication protocols such as remote key-less vehicles, speech recognition devices, etc. ), and can be seen as a simple "Man-in-the-Middle" attack.

One way to mitigate replay attacks is to introduce cryptographic nonces, which can be seen as numbers (pseudo-random or incremental/sequential numbers) which can ensure, when used appropriately, that old messages/transactions cannot be successfully repeated.

The Vulnerability

Due to the co-signernonce not being incremented upon signing, the signed messages by co-signers are able to be replayed if the co-signer is re-assigned as another co-signer, or later assigned as a signer (with or without another co-signer).

In this storage mapping, the uint256 keys actually represent authorised wallet addresses which are prepended with an authVersion number. This mapping therefore keeps track of who is authorised to access the wallet and the version number allows the wallet to clear all existing authorisations by incrementing the authVersion variable.

The nonces mapping stores the current nonce for each authorised address.

This nonce is then checked and incremented in the invoke1SignerSends, invoke1CosignerSends, and invoke2 functions (invoke0 does not need to check/increment the nonce as the native built-in nonce mechanism of Ethereum transactions protects against replay attacks).

Step 1:Message A: (Send ETH to Trent) — invoke2(signer=Alice, Cosigner=Bob, from=Alice)
Here Message A has been signed by Bob with a nonce of 1.

Step 2:Message B: (Bob gets authorised as a signer and his own cosigner) — setAuthorized(signer=Bob, authorizedAddress=Bob) Here Bob becomes authorised to invoke methods on the wallet, without a cosigner

We have written dedicated tests using the pytest framework to illustrate this attack, please refer to our test suite (tests/test_replay.py)

Recommendation

We suggested a couple of possible solutions to mitigate the replay attacks on the CoreWallet smart contract:

Integrate the nonce of the cosigner into the messages:

By utilising the nonce of both the cosigner and the signer, as well as incrementing accordingly, the cosigner's signed message would only be valid for the combination of nonce pair. Once this has occurred, then nonces[cosigner]++ will force the signed message to become invalid;

The drawback for this proposed solution is that the cosigner is then blocked from performing any other transactions that may increment the nonce. This means that a cosigner will be able to deny the transaction execution of any message they cosigned and messages will be required to come in order. (Nonces may be out of sync and messages will not get through).

Introduce a message_nonce:

By using a message nonce, the signature validation becomes message specific;

The downside of this method is that two competing messages from disjoint signers will be conflicting and only one message would be successfully processed. This creates a competition/race between messages.

Resolution

The development team fixed this vulnerability in commit 6b3784e by including the signing address as part of the signature data. This effectively ties the signature nonce to the signing address creating a unique signature for each signing address and
signer nonce.

Outdated ERC-721 Implementation (Resolved)

Background information

The ERC-721 standard describes how to build non-fungible tokens on the Ethereum Blockchain. All ERC-721 compliant tokens must implement the interface available here. In particular, all wallets must implement the onERC721Received() function as specified in the standard.

The Vulnerability

The Dapper Ethereum smart contract wallet (CoreWallet, deployed in its cloned and full versions) inherits the ERC721Receiver contract and as such, implements the onERC721Received() function.

Due to the fact that Dapper Labs were the original creators of the ERC-721 standard, the method of calling onERC721Received() conforms to a draft of the ERC-721 standard, not the final version. The final version of the standard was not published until after the CryptoKitties smart contracts were released, hence utilisation of the outdated implementation.

Specifically, the onERC721Received() function was not up to date with the latest ERC-721 standard as not take the correct arguments as specified by the standard:

ERC-721 standard: onERC721Received(address, address, uint256, bytes)

Dapper implementation: onERC721Received(address, uint256, bytes)

This function is to be called by ERC-721 contracts when a safeTransferFrom() is made to a contract address. Typically, these contracts would implement a function which verifies that the recipient address, when a contract, is compliant with
the ERC721TokenReceiver interface, expecting the onERC721Received() function of the Dapper contract to return 0x150b7a02 (equals to bytes4(keccak256("onERC721Received(address,address,uint256,bytes)"))).

Recommendation

We suggested changing ERC721Receiver and ERC721Receivable contracts to comply with the latest ERC-721 standard. Specifically, updating the onERC721Received() function to take an additional address (i.e. the address calling the safeTransferFrom() function).

Resolution

The development team updated the related smart contracts to support both the final ERC721 specification ERC721ReceiverFinal, and the previous one, ERC721ReceiverDraft (used for example by the CryptoKitties contract).

ERC-721 Event Log Poisoning (Resolved)

Background information

Events and logs in Ethereum are traditionally used to facilitate communications between smart contract and user interfaces (i.e front ends such as web or mobile applications). For example, in the context of non-fungible tokens, an ERC-721 transfer will emit the Transfer event log, prompting user interfaces to notify the related user(s) that a particular collectable was received.

The Vulnerability

The Dapper Ethereum smart contract wallet (CoreWallet , deployed in its cloned and full versions) inherits the ERC721Receiver contract and therefore implements the onERC721Received() function, which when called emits the ERC721Received event log.

This function can be called externally by any Ethereum account, resulting in ERC721Received events being generated arbitrarily.

Furthermore, the _from, _tokenId, and _data event parameters can be forged to any arbitrary value, allowing attackers to potentially replicate and use existing asset IDs (e.g. valid CryptoKitties token IDs), which could generate confusion for DApp
users.

We have developed a dedicated test using pytest to illustrate this issue (see tests/test_event_poisoning.py).

Recommendation

Implementing the following require statement in the onERC721Received() function:

require(msg.sender.doesContractImplementInterface(0x150b7a02));

This would ensure that only ERC-721 compliant contracts can call this function and trigger the ERC721Received event emission. Please note that this additional restriction can be bypassed by creating a malicious contract which complies with the ERC-721 interface and implements an external function (e.g. generateLogInWallet() which calls wallet.onERC721Received() ).

Another more restrictive approach could be to whitelist contracts which are authorised to call the onERC721Received() function.

Resolution

The two onERC721Received() functions no longer emit the ERC721Received event log in the updated version of the assessed smart contract.

Conclusion

This review focused exclusively on the Dapper smart contract wallet. The contract was particularly well written and all vulnerabilities identified during this assessment were acknowledged and addressed by the development team.

At the time of writing, Sigma Prime is in the process of performing a security assessment on various off-chain components (APIs, browser extension, databases, cloud infrastructure, etc.) supporting this wallet.

Sigma Prime is very supportive of efforts that bring Ethereum to a broad audience and we've enjoyed working with Dapper Labs on this assessment. If you're interested in a security review by Sigma Prime, feel free to reach out to us via email.